Dividend Aristocrats

Walgreen Co is the nation's largest drugstore chain with fiscal 2008 sales of $59 billion. The company operates 6,902 drugstores in all 50 states, the District of Columbia and Puerto Rico. The company is member of the S&P 500 and was a recent addition to the S&P Dividend Aristocrats index.

Walgreen was the only dividend raiser last week, which is not surprising during the slow summer season. Walgreen, which operates the largest chain of drugstores in the United States, raised its dividend by 22.2% to 13.75 cents/share. The company is a member of the elite dividend aristocrats index, and has increased its quarterly dividends for 34 consecutive years.

Emerson Electric Co., a diversified global technology company, engages in designing and supplying product technology and delivering engineering services to various industrial and commercial, and consumer markets worldwide. The company operates through five segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools.

By purchasing international stocks one essentially receives income in a different currency, which is a decent hedge against a possible devaluation of the US dollar. Another benefit of shopping for quality dividend stocks abroad is the huge potential for economic growth and development that both established and emerging economies posses.

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It operates in two segments, Oral, Personal, and Home Care; and Pet Nutrition. The company is a Dividend Achiever and a Champion. Colgate-Palmolive has paid uninterrupted dividends on its common stock since 1895 and increased payments to common shareholders every year for 46 years.

Standard & Poor's Dividend Aristocrats are underperforming the broader U.S. domestic indexes. on a year to date basis. Through April 4th, the Aristocrats have generated a return of -7.20% compared to the S&P 500 Index return of -6.70% and the Nasdaq Index return of +2.80%. The Aristocrats have managed to outperform the Dow Jones Industrial Average Index that has returned -8.60% so far this year.

Given the difficult economic environment, stocks of companies that pay a dividend have increasingly elected to reduce or eliminate dividends in order to conserve cash. S&P makes adjustments to the Aristocrats Index in December and only companies that paid more this year compared with 2008 will be retained . S&P's Aristocrats list currently contains 52 companies.

Overall investors have mainly been focusing on dividend cuts in 2009. I believe that most stocks that pay out dividends are cyclical in nature. Thus, they do not have the specific competitive advantages, which provide for a long and sustainable annual dividend increases over time.

I frequently post articles about Standard & Poor's Dividend Aristocrats. Barron's recently prepared a short video that provides detail on these high quality dividend paying companies.

In 2008 the dividend aristocrats’ index outperformed the S&P 500 by 15.50 percent. The dividend aristocrates lost 21.55% in 2008 versus the 37.00% loss for the S&P 500. In December Standard and Poor’s updated their Dividend Aristocrats list. The companies which were added were:

Standard & Poor's recently announced the companies that will comprise the Dividend Aristocrats for 2009. The S&P 500 Dividend Aristocrats are companies in the S&P 500 index that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. The 2009 Aristocrats total 52 companies for 2009 versus 60 companies for the 2008 Aristocrats.

Emerson Electric announced a 10% increase in the company's 4th quarter dividend. The new quarterly dividend increases to 33 cents per share versus 30 cents per share in the same quarter last year.

Preliminary performance results for S&P's dividend aristocrats shows they continued to outperform the broader U.S. market indexes in the month of October.